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Deere wraps up strong year despite Q4 losses

Despite a fourth-quarter loss of almost $223 million, Deere & Company officials on Wednesday reported the company's wrapping up a profitable year despite the international "historical economic slowdown," according to a company report.

The fiscal year wraps up showing an $873.5 million income for the company despite the fourth-quarter losses, which company officials attribute to "previously announced impairment of goodwill related to the John Deere Landscapes reporting unit and voluntary employee-separation expenses associated with the formation of the new agriculture and turf division," according to a Wednesday report. Without the expenses incurred in this division, the company would have netted a $99 million profit for the quarter.

Ag machinery sales were down by 26% in the fourth quarter and 14% for the entire year, Deere officials say. The decline is expected to spill into 2010, but it should level off a bit; company leaders expect a 10% decline in U.S. farm machinery sales.

"Cash receipts and commodity prices, while below their prior peaks, are anticipated to remain at healthy levels," according to Wednesday's Deere report. "However, farmers are expected to be cautious in their purchasing decisions as a result of sluggish overall economic conditions and near-term profitability issues in the livestock and dairy sectors."

Looking south, the trend's expected to reverse altogether in South America, where crops are off to a strong start. Paced by "good incomes for soybean and sugarcane producers and the continued availability of attractive government-supported financing," Deere officials expect sales in Brazil and other big crop-growing parts of South America to increase by 10% to 15% in the next year.

Despite a fourth-quarter loss of almost $223 million, Deere & Company officials on Wednesday reported the company's wrapping up a profitable year despite the international "historical economic slowdown," according to a company report.